[Financial News] Renault Korea, which unfairly disadvantaged its distributors using its trading position, has been sanctioned by the Fair Trade Commission.
The Fair Trade Commission announced on the 22nd that it has imposed corrective orders on Renault Korea’s practice of unilaterally enforcing a penalty system called “emergency order penalty” against its distributors, adjusting the supply prices of auto parts, and excessively reducing the distributors’ margins.
The emergency order penalty system allows distributors to receive parts on the next day regardless of the regular order schedule if they place an order by 3 p.m. on weekdays. However, the headquarters sets the supply prices of those parts higher than the regular order prices when supplying them to distributors.
From June 2012 to December 2022, Renault Korea operated a penalty system that reduces distributors’ margins by over 90% or eliminates them entirely if they urgently order essential inventory parts. As a result, penalties totaling 394,635,000 won were imposed on a total of 305 distributors.
In normal distributor transactions, when a supplier adjusts the supply prices of goods to distributors based on certain violations of obligations related to the distributors’ profits, such matters including obligations and price adjustments must be specified in the contract. The Fair Trade Commission determined that such actions unfairly disadvantaged distributors by abusing its trading position.
The Fair Trade Commission stated that it will actively monitor to prevent the recurrence of the same law violations against distributors by suppliers and will impose strict sanctions if violations occur.